2023-05-21 19:26:08
Short maturities favored over the medium and long term
In the third week of May 2023, three issues were organized on the public securities market for an announced total amount of 130 billion. The States (Cote d’Ivoire, Mali, Togo) raised 133.73 billion FCFA mainly on short-term maturities (91 days, 182 days and 364 days), the rest being negotiated on 3 years and 5 years .
The average level of coverage of emissions over this week is almost identical to the level of the previous week and is respectively displayed at 132.65% once morest 132.77%. This level of coverage of issues reflects, in the opinion of analysts, “the good momentum of the raising of resources on the MTP with Côte d’Ivoire which mobilizes 68.32 billion FCFA, Mali (34.13 billion FCFA) and Togo (31.28 billion FCFA)”.
Regarding Côte d’Ivoire, it issued an amount of 70 billion on May 16, 2023 on maturities of 91 days, 364 days and 3 years. This issue was covered up to 105.11% with 11 investors from the Union and strong enthusiasm from the Abidjan market (73%). It should be noted that Abidjan preferred this time to resort to open placements whereas during its previous exit, it was a closed placement reserved for national SVTs.
Second issuer of the week, Mali intervened on May 17, 2023 for an announced amount of 35 billion FCFA on also three maturities namely: 364 days, 3 years and 5 years. This solicitation by the State on the MTP attracted the interest of 12 investors for a level of coverage of 103.4%, with the contribution of investors resident in Mali up to 64%. The high bid rates on Mali compared to its peers show that investors are asking for more pledges to commit to this country’s issues.
Quite the opposite of Togo, which issued on May 11, 2023 with a coverage rate of 189.43% and the participation of 26 investors. A rush that ends the week on a high note and demonstrates that investors are particularly sensitive to the quality of the issuer’s signature. The announced amount is 30 billion over 182 days, 3 years and 5 years. The contribution of resident investors in Togo is 33%.
In short, issues in the third week of May took place in a market context favorable to the States of the Union. Investors are stimulated by comfortable rates favored in part by the directives of the BCEAO. Recall that the central regulator has lowered its key rate from 2.75 to 3% since March 16, the interest rate on the marginal lending window from 4.75% to 5%. Investors remain alert to signals of a possible continuation of rate adjustments since the FED and the ECB recently hiked rates. Will the BCEAO, which is holding its monetary policy committee at the beginning of June, agree in the same way, faithful to its objective of bringing inflation back below the 3% threshold? Wait and see.
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